Denmark GDP Q3 2016

Denmark: Revised data confirms mild acceleration in Q3

December 22, 2016

In Q3, the Danish economy grew a seasonally-adjusted 0.4% over the previous quarter, according to revised data released by Statistics Denmark (DST) on 22 December. The reading matched the preliminary estimate and came in above the 0.3% expansion in Q2. Denmark’s economy has been broadly stable this year, with healthy domestic demand thanks to fiscal and monetary stimulus offsetting sluggish external demand. In Q3, a jump in government consumption and a timid pick-up in fixed investment were behind the moderate acceleration. In annual terms, GDP rose a revised 1.2% (previously reported: +1.1% year-on-year), which also marked a pick-up from the 0.9% increase seen in Q2 and was the best performance in four quarters.

Private consumption decreased 0.1% in Q3 (previously reported: +0.1% qoq), down from Q2’s 0.2% increase and the worst result in 10 quarters. By contrast, growth in public consumption strengthened from Q2’s 0.6% expansion to an over five-year high of 1.4% growth in Q3. Fixed investment expanded mildly in Q3, inching up to 0.2% from Q2’s 0.1% increase (previously reported: Q3: -0.1% qoq, Q2: -0.3% qoq).

On the external side of the economy, exports of goods and services grew 0.7% (previously reported: 0.0%), which followed the 0.9% increase seen in Q2. Imports grew a robust 1.6% in Q3 (previously reported: +0.8%), accelerating from the flat result in Q2. As a result, the external sector’s net contribution to overall economic growth swung from plus 0.4 percentage points in Q2 to minus 0.6 percentage points in Q3, the lowest result in over two years.

The Central Bank expects GDP to grow 1.4% in 2017 and 1.5% in 2018. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.5% in 2017, which is down 0.1 percentage points from last month’s estimate. In 2018, the panel sees the economy accelerating to 1.7%.

Business confidence among Danish manufactures decreased to the neutral zero-point mark in August, indicating that manufacturers are neither optimistic nor pessimistic about the future, after two months of increasing optimism (July: +6.0 points month-on-month).